Correlation Between SPDR DoubleLine and FolioBeyond Rising

Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and FolioBeyond Rising at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SPDR DoubleLine and FolioBeyond Rising into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPDR DoubleLine Short and FolioBeyond Rising Rates, you can compare the effects of market volatilities on SPDR DoubleLine and FolioBeyond Rising and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SPDR DoubleLine with a short position of FolioBeyond Rising. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and FolioBeyond Rising.

Diversification Opportunities for SPDR DoubleLine and FolioBeyond Rising

-0.37

Correlation Coefficient

SPDR DoubleLine  FolioBeyond Rising

Very good diversification

The 3 months correlation between SPDR and FolioBeyond is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Short and FolioBeyond Rising Rates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FolioBeyond Rising Rates and SPDR DoubleLine is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SPDR DoubleLine Short are associated (or correlated) with FolioBeyond Rising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FolioBeyond Rising Rates has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and FolioBeyond Rising go up and down completely randomly.

Pair Corralation between SPDR DoubleLine and FolioBeyond Rising

Given the investment horizon of 90 days SPDR DoubleLine is expected to generate 2.41 times less return on investment than FolioBeyond Rising. But when comparing it to its historical volatility, SPDR DoubleLine Short is 7.19 times less risky than FolioBeyond Rising. It trades about 0.26 of its potential returns per unit of risk. FolioBeyond Rising Rates is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,083  in FolioBeyond Rising Rates on September 4, 2024 and sell it today you would earn a total of  451.00  from holding FolioBeyond Rising Rates or generate 14.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SPDR DoubleLine Short  vs.  FolioBeyond Rising Rates

SPDR DoubleLine Short

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR DoubleLine Short are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SPDR DoubleLine is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

FolioBeyond Rising Rates

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FolioBeyond Rising Rates are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, FolioBeyond Rising is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SPDR DoubleLine and FolioBeyond Rising

The main advantage of trading using opposite SPDR DoubleLine and FolioBeyond Rising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, FolioBeyond Rising can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FolioBeyond Rising will offset losses from the drop in FolioBeyond Rising's long position.

The idea behind SPDR DoubleLine Short and FolioBeyond Rising Rates pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.